Naval Ravikant

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Building Wealth

Getting rich is about knowing what to do, who to do it with, and when to do it. It is much more about understanding than purely hard work. Yes, hard work matters, and you can’t skimp on it. But it has to be directed in the right way.

If you don’t know yet what you should work on, the most important thing is to figure it out. You should not grind at a lot of hard work until you figure out what you should be working on.

How to Get Rich

Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.

You’re not going to get rich renting out your time. You must own equity—a piece of a business—to gain your financial freedom.

You will get rich by giving society what it wants but does not yet know how to get. At scale.

Pick an industry where you can play long-term games with long-term people.

Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.

Learn to sell. Learn to build. If you can do both, you will be unstoppable.

Arm yourself with specific knowledge, accountability, and leverage.

Specific knowledge is knowledge you cannot be trained for. If society can train you, it can train someone else and replace you.

Specific knowledge is found by pursuing your genuine curiosity and passion rather than whatever is hot right now.

Building specific knowledge will feel like play to you but will look like work to others.

Specific knowledge is often highly technical or creative. It cannot be outsourced or automated.

Embrace accountability, and take business risks under your own name. Society will reward you with responsibility, equity, and leverage.

Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).

Code and media are permissionless leverage. They’re the leverage behind the newly rich. You can create software and media that works for you while you sleep.

An army of robots is freely available—it’s just packed in data centers for heat and space efficiency. Use it.

If you can’t code, write books and blogs, record videos and podcasts.

Leverage is a force multiplier for your judgment.

Work as hard as you can. Even though who you work with and what you work on are more important than how hard you work.

Become the best in the world at what you do. Keep redefining what you do until this is true.

Apply specific knowledge, with leverage, and eventually you will get what you deserve.

Productize Yourself

Leverage

The specific knowledge is sort of this weird combination of unique traits from your DNA, your unique upbringing, and your response to it. It’s almost baked into your personality and your identity. Then you can hone it.

No one can compete with you on being you. Most of life is a search for who and what needs you the most.

Specific knowledge is found much more by pursuing your innate talents, your genuine curiosity, and your passion.

If it entertains you now but will bore you someday, it’s a distraction. Keep looking.

when you do things for their own sake, you create your best work. Even if you’re just trying to make money, you will actually be the most successful.

Follow your intellectual curiosity more than whatever is “hot” right now. If your curiosity ever leads you to a place where society eventually wants to go, you’ll get paid extremely well.

You build your brand in the meantime on Twitter, on YouTube, and by giving away free work. You make a name for yourself, and you take some risk in the process. When it is time to move on the opportunity, you can do so with leverage—the maximum leverage possible.

One form of leverage is labor—other humans working for you. It is the oldest form of leverage, and actually not a great one in the modern world. [1] I would argue this is the worst form of leverage that you could possibly use. Managing other people is incredibly messy. It requires tremendous leadership skills. You’re one short hop from a mutiny or getting eaten or torn apart by the mob. [78] Money is good as a form of leverage. It means every time you make a decision, you multiply it with money. [1] Capital is a trickier form of leverage to use. It’s more modern. It’s the one that people have used to get fabulously wealthy in the last century. It’s probably been the dominant form of leverage in the last century. You can see this by looking for the richest people. It’s bankers, politicians in corrupt countries who print money, essentially people who move large amounts of money around. If you look at the top of very large companies, outside of technology companies, in many, many large old companies, the CEO job is really a financial job. It scales very, very well. If you get good at managing capital, you can manage more and more capital much more easily than you can manage more and more people. [78] The final form of leverage is brand new—the most democratic form. It is: “products with no marginal cost of replication.” This includes books, media, movies, and code. Code is probably the most powerful form of permissionless leverage. All you need is a computer—you don’t need anyone’s permission.

The most interesting and the most important form of leverage is the idea of products that have no marginal cost of replication.

You’re never going to get rich renting out your time.

Whenever you can in life, optimize for independence rather than pay. If you have independence and you’re accountable on your output, as opposed to your input—that’s the dream.

A leveraged worker can out-produce a non-leveraged worker by a factor of one thousand or ten thousand. With a leveraged worker, judgment is far more important than how much time they put in or how hard they work.

What you want in life is to be in control of your time. You want to get into a leveraged job where you control your own time and you’re tracked on the outputs. If you do something incredible to move the needle on the business, they have to pay you. Especially if they don’t know how you did it because it’s innate to your obsession or your skill or your innate abilities, they’re going to have to keep paying you to do it.

Value your time at an hourly rate, and ruthlessly spend to save time at that rate. You will never be worth more than you think you’re worth.

No one is going to value you more than you value yourself. You just have to set a very high personal hourly rate and you have to stick to it.

Always factor your time into every decision. How much time does it take? It’s going to take you an hour to get across town to get something. If you value yourself at one hundred dollars an hour, that’s basically throwing one hundred dollars out of your pocket. Are you going to do that?

Set a very high hourly aspirational rate for yourself and stick to it. It should seem and feel absurdly high. If it doesn’t, it’s not high enough. Whatever you picked, my advice to you would be to raise it.

Ways to get lucky: • Hope luck finds you. • Hustle until you stumble into it. • Prepare the mind and be sensitive to chances others miss. • Become the best at what you do. Refine what you do until this is true. Opportunity will seek you out. Luck becomes your destiny.

To summarize the fourth type: build your character in a certain way, then your character becomes your destiny.

Everybody wants to get rich immediately, but the world is an efficient place; immediate doesn’t work. You do have to put in the time. You do have to put in the hours, and so I think you have to put yourself in the position with the specific knowledge, with accountability, with leverage, with the authentic skill set you have, to be the best in the world at what you do.

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Naval Ravikant

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